In last year’s remake of the classic film The Manchurian Candidate, a sinister private equity group by the name of “Manchurian Global” tries to stage a coup d’etat of sorts by replacing the American President with a brainwashed politician who is programmed to serve their interests (no, it’s not inspired by President Bush). While the scenario presented in the film is rather outlandish, the statement being made is not. Much has been said of the increasing influence of the corporate entity in politics and government, but little has been done to combat it. In Washington, an aversion to discussing the topic is hardly surprising; after all, legislators will only be impoverishing themselves by creating stringent regulations on campaign cash flow. But accountability is a cornerstone of democracy; our elected leaders have always been accountable to the voting public (at least in theory). Large donations from special interest groups, corporations, unions, and a host of others looking to curry favors from legislators, erode this fundamental principle of public accountability.

The notion of the electorate as a “Boss” to whom the government must answer at every turn is ingrained in American political culture. But the harsh reality of political campaigning is challenging this institutionalized notion of governmental accountability. It is more expensive than ever to run a successful campaign for elected office, as political consultants, public relations firms, internet and print advertisers, campaign managers, and media relations personnel eat up large chunks of a campaign’s budget. According to recent trends, a candidate needs in the vicinity of $700,000 to $1 million to run a competitive House campaign and at least $5 million to have a shot at a Senate seat. Opensecrets.org reports that over $343 million was spent by the two primary presidential candidates, George W. Bush and John Kerry, in 2004. Overall the $4 billion is the estimated cost for the 2004 Presidential and Congressional election cycle.

The most recent change in campaign-finance laws, which remained significantly unchanged since the post-Watergate reform in 1974, was spearheaded by Senators John McCain (R-Ariz.) and Russell Feingold (D-Wis.). President Bush signed the McCain-Feingold bill, known officially as the Bipartisan Campaign Reform Act (BCRA), into law in 2002. Under the new provisions, “soft-money” – unregulated contributions to political parties for general activities – was explicitly banned. Restrictions were also placed against interest groups airing “issue ads,” which referred to candidates and praised their positions, but stopped short of endorsing the candidate himself, within 60 days of a general election and 30 days of a primary. To compensate for the elimination of soft money, the bill doubled the limit on individual “hard money” contributions – donations sent directly to candidates and the party – to $2,000 per person. Campaign finance reformists hoped that the new bill would remove or, at the very least, lessen the amount of money involved in political campaigns.

Unfortunately, the 2004 election cycle was the costliest ever. Last year’s election made apparent the weaknesses in what was touted as “ground-breaking legislation.” The aforementioned $4 billion figure is up from $3 billion estimated to have been spent during the 2000 cycle and $2.2 billion during the 1996 cycle. This spectacular surge in campaign cash has occurred despite the soft-money restrictions of the BCRA

In retrospect, it appears that the legislation was well-intentioned, but inadequate. It has been effective in combating soft-money donations to political machines, but paradoxically the influence of soft money has become even greater and its contributors less accountable. Well heeled 527 organizations, named after the section of the tax code that created them, acted as surrogates for the party and helped channel the banned soft money into political campaigns. Unlike Political Action Committees (PACs), these groups are not regulated by the Federal Elections Commission (FEC), have no contribution limits, and are exempt from Federal Income Tax. Their influence is not diminished by the regulation that they cannot specifically endorse an individual for office. As the line between “candidate advocacy” and “issue advocacy” becomes blurred, such 527 groups can endorse candidates by proxy. It is widely believed that groups such as MoveOn.org and SwiftBoat Veterans for Truth were instrumental in changing public opinion against the candidate they attacked. The effect of the campaign run by the SwiftBoat Veterans for Truth was especially pronounced as Mr. Kerry’s poll numbers dropped after their attacks went on the air.

Detractors argue that the effects of continuing soft-money influence are being overblown. In 2004, the Democratic Party broke records by receiving over $220 million in direct donations. Last year, individual contributions to parties and candidates were up by $1 billion from 2000. The Economist reports that the proportion of donations coming from individuals giving $200 went up to one-third from 10% in 2000. Howard Dean amassed over $50 million directly from his website, mostly an amalgamation of small donations, while the Kerry campaign raised over $80 million from theirs. All this indicates that a greater number of voters contributed to fund-raising campaigns, as the clout of corporate heavyweights and special interests was lessened.

Furthermore, BCRA supporters argue that the effect of the notorious 527 Groups on the Presidential campaign is more a function of their outrageous claims, which guarantee them free publicity in today’s media circus, rather than their financial muscle. None of these groups raised more money than the parties themselves, but they were able to influence debate on issues through the extensive media coverage their radical voices gained. For example, MoveOn.org had a video on its website submitted by a visitor that compared George W. Bush to Adolf Hitler. News of the video spread like wildfire over the internet, as conservative bloggers and right-wing news outlets rushed to condemn it. While this did not reflect well on MoveOn, it got free air-time and the public became cognizant of its existence. Similarly, the Swift-Boat Veterans for Truth spent only $2.3 million on its advertising campaign, but its controversial ads garnered notoriety and its representatives took to the widely watched political talk show circuit.

But the issues with 527 groups run deeper than debates over their funding. It appears as if these groups have set up a political machine, replete with indigenous agendas and leaders, separate from the parties they implicitly support. If an influential 527 group holds a position on an issue such as abortion, its activities could impact debate within the party on the particular issue. The venue for discourse will then be shifted. It may well be that the political party does not support the explicit agenda of a 527 Group, but the media has the habit of lumping everything it perceives as “the left” or “the right” into a single group. This would send an ambiguous message to voters who will have a hard time distinguishing the party platform from that of its soft-money supporters. It also doesn’t help that these groups are allowed to accept donations from any individual in any amount. It is quite possible that an influential 527 group may eventually raise more money than parties themselves. While we may not get a Manchurian candidate, a MoveOn.org candidate isn’t out of the picture.